It has always been clear that non-compete agreements between an employer and its bargaining unit employees are a mandatory subject of bargaining, but it has never been clear that the same is true for agreements between an employer and a third-party limiting the third-party’s ability to hire the employer’s unionized employees. However, employers finally received some (non-binding) clarity in the form of an Advice Memorandum from the National Labor Relations Board’s Office of the General Counsel, in which the Division of Advice concluded that an employer has no obligation to bargain over its decision to include limitations on its third-party contractors’ ability to hire and use former unit employees.

In Duke Energy Indiana (Case 25-CA-214176), the union represented the employer’s linemen who constructed and maintained the employer’s power lines and other equipment. The employer also used subcontracted linemen consistent with the terms of the parties’ collective bargaining agreement, and the union represented many of the linemen working for the subcontractors. However, many of the employer’s linemen found that working for the subcontractors through the union’s hiring hall offered better wages and benefits, and thus terminated their employment and began working through the hiring hall for the subcontractors. Looking to stem the tide of linemen leaving, the employer began enforcing contractual provisions in the agreements with its subcontractors prohibiting them from soliciting the employer’s linemen. In response the union filed an unfair labor practice charge alleging that the employer had an obligation to bargain over the implementation and enforcement of the non-solicitation provision in the agreements with the subcontractors.

The applicable standard [for protected concerted activity] should not sanction an all-but-meaningless inquiry in which concertedness hinges on whether a speaker uses the first-person plural pronoun in the presence of fellow employees and a supervisor. In addition, the protection afforded by the Act to engage in protected concerted activity requires a clear standard that can be relied upon by employees who seek to engage in such activity and by employers who must determine whether particular employee conduct is within or outside the protection of the Act.

The Board articulated such a standard more than three decades ago in the Meyers Industries cases. But even though the Meyers decisions have never been overruled, subsequent decisions…have deviated from Meyers and blurred the distinction between protected group action and unprotected individual action. Our decision today begins the process of restoring the Meyers standard by overruling conflicting precedent that erroneously shields individual action and thereby undermines congressional intent to limit the protection afforded under the Act to concerted activity for the purpose of mutual aid or protection.

An employer, as defined by Section 2(2) of the National Labor Relations Act (the Act), may be considered a joint employer of a separate employer’s employees only if the two employers share or codetermine the employees’ essential terms and conditions of employment, such as hiring, firing, discipline, supervision, and direction. A putative joint employer must possess and actually exercise substantial direct and immediate control over the employees’ essential terms and conditions of employment in a manner that is not limited and routine.

Under this rule, there must be evidence of direct and immediate control before a joint-employer relationship can be found. “[I]t will be insufficient to establish joint-employer status where the degree of a putative joint employer’s control is too limited in scope (perhaps affecting a single essential working condition and/or exercised rarely during the putative joint employer’s relationship with the undisputed employer).”

rulemaking in this important area of the law would foster predictability, consistency and stability in the determination of joint-employer status. The proposed rule reflects the Board majority’s initial view, subject to potential revision in response to public comments, that the National Labor Relations Act’s intent is best supported by a joint-employer doctrine that does not draw third parties, who have not played an active role in deciding wages, benefits, or other essential terms and conditions of employment, into a collective-bargaining relationship for another employer’s employees.

In her dissent, Member McFerran asserts that:

there is no good reason to revisit Browning-Ferris, much less to propose replacing its joint-employer standard with a test that fails the threshold test of consistency with the common law and that defies the stated goal of the National Labor Relations Act: “encouraging the practice and procedure of collective bargaining.”

Those seeking to comment on the Proposed Rule must submit their comments on or before November 13, 2018.

Senator Bernie Sanders (I-VT), joined by a number of union leaders and Democratic lawmakers, yesterday announced introduction of the “Workplace Democracy Act” in the Senate. The bill recycles a number of the failed legislative and administrative efforts of the past decade or so to reform labor law to facilitate union organizing, including the Employee Free Choice Act (EFCA) and Sen. Sanders’ 2015 version of this bill. But it expands upon those efforts significantly to include numerous additional labor-friendly proposals. The bill, co-sponsored by nine Democrat Senators, includes the following provisions:

Card Check: Like the repeatedly rejected EFCA bills, this provision would amend the National Labor Relations Act to facilitate union organizing by requiring certification based on “card check” — the presentation of publicly collected employee signatures.

Interest Arbitration: Again, like EFCA, it would eliminate freedom of contract by requiring that the terms of a first labor contract would be set by a government authorized arbitrator after just 120 days of negotiations between management and a union.

Limit Employer Speech: It would prohibit employers from communicating with employees about a wide variety of issues, including union representation, in workplace meetings.

Authorize Secondary Boycotts: The bill would delete 1947 amendments to the Act, to allow unions to apply boycott and other economic pressure against customers, vendors, contractors and other parties to force an employer to capitulate to union demands.

Expand Definition of Employee: It would incorporate into federal law the California Supreme Court’s recently adopted “ABC Test” for determining whether a worker is an “independent contractor” or an “employee,” to draw a wider variety of workers into the coverage of the NLRA, allowing them to organize a workplace.

Rep. Mark Pocan (D-WI) has introduced a parallel measure in the House, along with co-sponsor Rep. Rosa DeLauro (D-CT).

This bill reflects the most comprehensive and extreme compilation of organized labor’s policy desires introduced in recent memory. In the current Congress, this bill is unlikely to even progress out of Committee in either chamber, and likely serves primarily as a vehicle to force candidates in the upcoming midterm elections to “go on record” on key issues for organized labor. It is also no coincidence that many of the Senators discussed as likely 2020 Presidential contenders have joined as initial co-sponsors.

Management cannot afford to ignore this bill all the same. It is certain to drive discourse and mobilization efforts by labor unions in the run-up to the 2018 midterms. Moreover, if the House flips to a Democratic majority after November’s elections — and Committee leadership with it — the various elements of this bill would comprise the legislative agenda on traditional labor issues. There would be committee hearings and floor debate, and further mobilization around that, to be sure.

It would be prudent to get educated on these issues and to adjust policy and operational strategies accordingly.

In Long Beach Memorial Medical Center, Inc., 366 NLRB No. 66 (April 20, 2018), the Board ruled that the hospital employer’s prohibition of non-approved pins and badges was unlawfully overbroad. As a general rule, employees are permitted to wear union insignia at work in the absence of “special circumstances.” In hospitals, out of concern for the possible disruption to patient care, this general rule is modified and restrictions on wearing union insignia are presumed valid if they are limited to immediate patient care areas. Restrictions on wearing union insignia in non–patient care areas, however, are presumed unlawful unless the hospital establishes “special circumstances” justifying the restriction.

Long Beach Memorial Health Services (“MHS”) operates two hospitals in the Long Beach, California area. As is standard in hospitals, members of the MHS staff are required to wear identification badges either affixed to their uniform or attached to a retractable string pulley connected to a “badge reel.” MHS maintained two policies challenged in this case. First, MHS maintained a policy that required that “[o]nly MHS approved pins, badges, and professional certifications may be worn.” Second, MHS maintained a policy applicable to direct care providers stating that “[b]adge reels may only be branded with MemorialCare approved logos or text.” Thus, the policy prohibited direct care providers from wearing badge reels branded with union insignia.

The Board likewise held, against the vote of a dissenting Member, that the badge-reel restriction was likewise invalid. The disagreement arose because the badge-reel restriction applied only to direct care providers. The majority held that this did not save the policy because the critical question is not the person to whom the policy applied, but the area of the hospital in which it applied. The badge-reel restriction was held invalid because it applied even in non-patient care areas. As the majority noted, direct patient care providers necessarily move throughout the hospital and spend time in non-patient care areas.

It is worth noting that the Board issued this opinion afterthe December 14, 2017 opinion in The Boeing Corporation case. In Boeing, the Board overturned the Lutheran Heritage standard for determining whether the mere maintenance of a facially neutral work rule might still be found to violate the National Labor Relations Act because “employees would reasonably construe the language to prohibit Section 7 activity.” Boeing replaced that standard with a more fact-intensive inquiry, taking into account the nature and extent of the potential impact on NLRA rights, and the employer’s legitimate justifications associated with the rule. Despite having adopted the more fact-intensive standard in Boeing in December 2017, the majority in this case focused almost exclusively on the text of the policies in question. This may not signal a quick departure from Boeing, but rather the Board’s interest in adhering to the principles in the more specific precedent dealing with union insignia in hospitals. We will continue to monitor how these cases develop.

On December 14, 2017, the National Labor Relations Board published a Request for Information in the Federal Register, seeking public comment regarding the December 2014 overhaul of its representation election procedures. The Board twice extended the deadline for submission of feedback. Before the window closed last night, there were almost 7,000 submissions. This number is obviously exaggerated by the number of form submissions sent in at the behest of organized interests. A quick glance at the Board’s catalog page shows consecutive submission of files with the same document name (e.g., “do_not_rescind_the_2014_rules_997.pdf,” “do_not_rescind_the_2014_rules_998.pdf,” “do_not_rescind_the_2014_rules_999.pdf,” etc.).

Regardless, there has been a significant amount of comment, and we will now need to watch whether the Board uses this feedback as the basis for further internal analysis and activity, or issuance of a formal Notice of Proposed Rulemaking.

Labor lawyer John Ring was sworn in today as Chairman of the National Labor Relations Board for a term ending on December 16, 2022. The Board’s announcement includes the following remarks from the new Chairman:

“I thank the President for the opportunity to serve as Chairman of the NLRB,” Ring said. “I am honored to serve alongside the dedicated professionals at the Agency. My career as a labor lawyer has given me a great appreciation for the work of the NLRB and its important mission. I look forward to working with my colleagues to ensure that the NLRA is interpreted and enforced as it is written and consistent with its amendments.”

Like former Chairman Miscimarra, Mr. Ring was most recently a partner at law firm Morgan Lewis. While Chairman Miscimarra was able to navigate the various potential conflicts and recusal issues following his tenure as a prominent labor lawyer in private practice, the political landscape has shifted significantly in just the last few years. As seen recently, Labor and its allies in the Democratic Party seem intent on brandishing a broad recusal argument in order to preclude Republican majorities sufficient to hand down decisions unfriendly to unions. It is very likely we will see efforts to pressure Chairman Ring into recusals like the recent campaign against Member Emanuel.

Upon his swearing in, Chairman Ring also recognized Member Kaplan for his recent interim service as Chairman. Member Kaplan will continue to serve his term which expires on August 27, 2020. The next term to expire is that of Member Mark Gaston Pearce, on August 27, 2018.

Connecticut state legislators are considering a bill to outlaw group meetings by employers to discuss a variety of matters including the issue of union representation. “An Act Concerning Captive Audience Meetings,” HB5473, would allow workers to file a lawsuit to challenge discipline for not attending a mandatory employer meeting where union issues are discussed. As introduced, the bill states:

no employer, or agent, representative or designee of such employer, shall require an employee to attend an employer-sponsored meeting with the employer or its agent, representative or designee, the primary purpose of which is to communicate the employer’s opinion concerning political or religious matters, except that an employer or its agent, representative or designee may communicate to an employee any information concerning political or religious matters that the employer is required by law to communicate, but only to the extent of such legal requirement.

“Political matters” include: “[e]lections for political office, political parties, legislation, regulation and the decision to join or support any political party or political, civic, community, fraternal or labor organization….”

There is strong support for the notion that such a law would be preempted by the National Labor Relations Act, and possibly precluded by the First Amendment. The Connecticut Attorney General concluded just about as much back in 2011, the last time there was any momentum for such a proposal. Labor supporters, however, argue that the mandatory nature of such meetings are not speech, but rather conduct, subject to regulation under the NLRA.

The Board is seeking feedback to three questions regarding the 2014 Election Rule, which modified the Board’s representation-election procedures located at 29 CFR parts 101 and 102:

1. Should the 2014 Election Rule be retained without change?

2. Should the 2014 Election Rule be retained with modifications? I14f so, what should be modified?

3. Should the 2014 Election Rule be rescinded? If so, should the Board revert to the Representation Election Regulations that were in effect prior to the 2014 Election Rule’s adoption, or should the Board make changes to the prior Representation Election Regulations? If the Board should make changes to the prior Representation Election Regulations, what should be changed?

This Request for Information was approved in December 2017 by former Board Chairman Philip A. Miscimarra and Members Marvin E. Kaplan and William J. Emanuel, while Members Mark Gaston Pearce and Lauren McFerran dissented.

In KHRG Employer, LLC d/b/a Hotel Burnham & Atwood Cafe, 366 NLRB No. 22 (Feb. 28, 2018), a unanimous panel of the Board held that the employer did not violate the Act when it fired an employee who breached internal security measures to lead a group of employees to present management with a petition. The employee and union were attempting to organize the employees at the employer’s hotel, and held a rally outside the hotel which drew approximately 100 attendees. Shortly after the rally, an employee organizer led a group of approximately six co-workers and fourteen non-employees into the hotel. The employee organizer lied to a security guard, indicating that the group was composed of employees only, and used a security passcode to unlock a door to a secure area. The employee organizer was subsequently terminated for committing a “serious security breach.”

The Board explained the relevant standard thus:

When, as here, an employer defends a discharge based on employee misconduct that is a part of the res gestae of the employee’s protected concerted activity, the employer’s motive is not at issue. Instead, such discharges are considered unlawful unless the misconduct at issue was so egregious as to lose the protection of the Act.

There was no question that the delivery of the petition to management was “protected activity.” But considering the premeditated nature of the conduct, the intentional misrepresentation to the security guard, and the improper use of the passcode, the Board held that the employee

flagrantly violated the hotel’s security protocol and unnecessarily placed at potential risk the security of other employees and the Respondent’s property, including valuables, confidential files, and financial documents. This breach of security cannot be dismissed as an impulsive act. It was a predetermined course of action.

Therefore, the Board found that the employee lost the protection of the Act, and his termination did not violate Section 8(a)(1).

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